New administrative VAT decision: discretionary portfolio management versus advisory management

Written by Christoph Zenner 14 April 2015


The Belgian VAT administration recently published a new administrative decision clarifying the VAT treatment of portfolio discretionary management and advisory management based on the ECJ case Deutsche Bank.

  • Discretionary portfolio management

Discretionary portfolio management consisting of (1) a service of analysing and monitoring the assets of client investors and (2) a service of actually purchasing and selling securities qualifies as a single service subject to VAT. No VAT exemption is applicable in this case.

  • Advisory management

Advisory management consisting in providing personalized recommendations on transactions with securities where it is up to the client to decide whether or not to proceed with a purchase/sale of securities is subject to VAT.

If the client investor requests the same portfolio manager to proceed with the purchase/sale of securities, only the brokerage fee should be VAT exempt.

If the advisory management and the purchase/sale of securities are remunerated by a single price, the price should be split in order to allow a distinction to be made between the service fee for the advisory management, on the one hand, and the brokerage fee for the purchase/sale of securities, on the other.

This decision will be effective as of 1 July 2015.

Following the ECJ case Deutsche Bank dated 2012, most of the portfolio managers have already adapted their invoicing structure and agreements. Considering this new decision, it is, however, recommended to review the agreements to ensure that they are in line with the new administrative decision.

For more information, please contact your local PwC adviser.